learn & keep

12 The Economic Times Wealth September 23-29, 2019

Should you buy or hire a car?

In the light of the debate over millennials' penchant for hiring cabs rather than buying their own
cars, Riju Mehta does a cost comparison for both options to help you make a clear choice.
Let us compare the total cost of owning a Maruti Suzuki Dzire and hiring Uber cabs, in Delhi, over a period of
three years. We have only considered office trips and excluded other personal trips, including holidays.

COST OF OWNING A CAR COST OF HIRING A CAR

ASSUMPTIONS
Price of Maruti Daily total distance covered: 40 km
Suzuki Dzire Total running cost Daily trips: 2
(3 years) Time taken in each trip: 50 minutes
`5.82 lakh Monthly distance covered: Tolls, tax and surge pricing included.
(Ex-showroom, Delhi)
1,000 km Number of days the car is used in a month: 25 days
Petrol cost: `72.7/lt Cost of petrol in Delhi on 19 September (actual): `72.7/litre
Loan cost Mileage: 22 km/lt
Interest rate: 9.5% Monthly running cost:
Loan term: 3 years `3,304 Uber Go
Down Loan Total running cost:
payment interest Uber fare is the sum of base fare and charges for time and
`1.18 lakh
`58,200 `75,495 distance covered during each trip
Cost of ownership
Total insurance in 3 years Base fare Per minute Per km
cost (3 years) `52.5 `1.05 `7.8
`9.8 lakh
`60,000 Without surge pricing (with toll, etc) TOTAL COST FOR 3
YEARS
Total cost of
`105 + `105 + `315 + `50
Registration/taxes owning in 3 years `5.1 lakh
(with chauffeur) Base fare Time Distance Toll
(3 years) (For two (For two (For 20 km (Can vary
trips in a trips of 50 one way, or and in-
day) minutes 40 km in a clude tax,
`72,000 `15.2 lakh each) day) surcharge)
(@`15,000 per month)

Total servicing & Resale value after Cost per day

maintenance cost 3 years
(3 years)
`575
`3.7 lakh TOTAL COST FOR 3
`30,000 With surge pricing (including toll, etc) YEARS
Net cost
Parking cost & 575 X 1.5 `7.7 lakh
miscellaneous `6.1 lakh
charges (3 years) Cost per day x multiplier (which can vary)

`50,000 `11.5 lakh Cost per day

(with chauffeur)
`862

HIRING IS BETTER WITHOUT SURGE PRICING

Without surge and ` 1 lakh Without surge and ` 6.3 lakh With surge, ` 1.5 lakh With surge, ` 3.7 lakh
without chauffeur with chauffeur without chauffeur with chauffeur
in 3 years, if you in 3 years, if you in 3 years, if you in 3 years, if you
YOU SAVE HIRE YOU SAVE HIRE YOU SAVE OWN YOU SAVE HIRE
a car a car a car a car

ET WEALTH Personal satisfaction Ease of taking trips Instant access Safer for women
If you own The sheer pleasure of Dealing with an emergency or taking You have a car at your disposal at all Given the cases of misconduct
ANALYSIS a car... buying and driving one's driving vacations are much easier to times, without the hassle of booking, by cab drivers, it’s safer for
Hiring an Uber is cheaper own car is incomparable. deal with if you have your own car. waiting or cancellation. women to drive on their own.
than buying a car, with
or without a chauffeur.
However, owning a car is
a better option if you are Dealing with traffic snarls Better use of time No need for navigation
If you hire The biggest benefit of a cab is that Hiring a car, if you don't have a chauffeur, If your sense of direction is non-existent,
impacted by surge pricing. you don't have to drive yourself out of means plenty of time at hand to catch up it is easier to leave the complicated routes
Here are some other pros & a cab...
frequent traffic jams and bottlenecks. with office mails and make calls. to the driver, particularly in metros.
cons of both the options.